Bank Leumi in a strategic groundbreaking move in the US: Will engage in a deal to merge Bank Leumi USA with Valley National Bank

TEL AVIV, Israel, Sept. 23, 2021 /PRNewswire/ -- Bank Leumi (TASE: LUMI) signed tonight an agreement to merge Bank Leumi USA and Valley National Bank in a deal that reflects Bank Leumi USA valuation of approximately $1.2 billion (~ 140% on equity). Leumi will hold just above 14% of the merged bank stocks after the merger and will be the largest non-controlling shareholder. Approximately 90% of proceeds for the transaction will be paid in the form of Valley common stock, with the remainder in cash. Leumi will appoint two directors and an observer to the board of directors of the merged bank; Bank Leumi USA CEO, Avner Mendelson, is expected to serve as Vice Chairman in the merged bank and other senior executives will serve in a variety of key positions. Leumi and Valley have also entered into an agreement providing for an ongoing business relationship which will include loan participations and will provide banking services to customers of both banks. Leumi's significant holding in shares, ownership structure and business agreement positions it to realize its strategy of expanding its activity in the U.S. market. The deal is expected to be completed in the first or second quarter of 2022.

The merged bank, which will be the 29th largest bank traded on the U.S. stock exchange, will be well positioned to grow its business activity in a variety of strategic areas, some of which Bank Leumi USA already has unique expertise in, including: high-tech, venture capital, real estate development and private banking. Bank Leumi USA is currently present in New York, Chicago, Florida and California. Valley National Bank currently has presence in New Jersey, New York, Florida and Alabama. As of June 30^th, 2021, Valley had total assets of approximately $41 billion pre-transaction with a credit portfolio of about $32 billion. It's profit for the first half of 2021 amounted to $230 million and for 2020 to about $378 million.

Following the transaction, the merged bank will be able to expand its activity to new markets across the U.S., offering its clients unique and more comprehensive value offerings.

Bank Leumi Le-Israel's CEO Hanan Friedman added that, "For Leumi, this is a strategic move designed to deepen and expand our exposure to the U.S. The merger will provide Leumi significant and unprecedented presence and market access for an Israeli bank in the U.S. This is positive news for our commercial and technology customers, who will enjoy a wider range of product offerings and the capabilities of a top and prosperous U.S. bank. Valley's strong and experienced management team which is headed by Chairman, President and CEO Ira Robbins, will benefit from the addition of Leumi USA team members. This ensures an ongoing commitment to Israeli customers and Leumi USA employees, who will enjoy the benefits of working with a top bank with an impressive growth trajectory."

Bank Leumi USA CEO, Avner Mendelson: "After years of transformation, significant growth and establishing Bank Leumi USA as a leader in commercial banking, this merger is a natural step and a strategic milestone in our journey to reinforce our operations and our unique value proposition in the US market. In Valley as a bank, and Ira as its Chairman and CEO, we have found an unparalleled strategic fit to accomplish our vision. I am confident that our high caliber talent, regional presence and business lines will become growth engines for the combined bank and am excited about the opportunities that the merger brings with it for the bank's employees and clients."

Ira Robbins, Valley's Chairman, President & CEO commented that, "We are extremely excited about combining Bank Leumi with Valley and the diverse growth opportunities that we expect the partnership will bring.  Bank Leumi's unique deposit verticals, including the technology and venture capital business, will continue the significant funding improvement that we have driven over the last few years.  On the lending side, Bank Leumi will add diversification into niche C&I segments and new geographies including in California and Illinois.  We are also eager to scale Bank Leumi's private banking platform across Valley's larger customer base and footprint.  Leveraging these new and distinct platforms, and the talents of Leumi's management and employees, will represent the next exciting phase of our evolution as a premier full-service commercial bank." 

For more information visit www.leumi.co.il or contact Adi Molcho Weinstein, VP, Head of Investor Relations, at [email protected]

SOURCE Bank Leumi

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